A new survey suggests that digital only banks provide the best experience for banking clients. The survey is the 2019 FIS Performance Against Customer Expectations (PACE) study. The study found that direct-to-consumer banks – typically digital-only banks – had the highest consumer satisfaction of any category.

Particularly noteworthy is that the direct to consumer banks overtook credit unions on a year over year basis from the same study. While the survey also states that digital banks also had the lowest rate of those surveyed leave their bank. However, it would be fair to assume that digital banks have the newest customers of all banks, so it would seem reasonable to say that it is difficult to judge loyalty based on a different level of tenure with different types of entities.

A press release highlighted the following major conclusions from the report, which was focused on the U.S. consumer.

73 percent of consumer banking interactions are digital in nature (mobile or online)

Nearly two-thirds (65 percent) of younger millennials (between ages of 18 and 26) reported that they have not used any branches at all in the prior month.

Referrals are particularly important to younger millennials. Seventy-five percent of these consumers said they were referred to their current primary banking institution.

Millennials’ satisfaction with community banks dropped by nearly half from 2018 levels, indicating that these institutions are not meeting the digital needs of younger generations.

The trends from the survey definitely provide a note of caution for community banks with millenials not even visiting a bank branch. That said, the group is also least likely to be searching for a business loan or a large home loan, transactions that still get a great deal of traffic at branches.

“The battleground for winning and keeping today’s banking consumers is in the front lines of customer experience,” said Bruce Lowthers, co-chief operating officer, FIS. “While security and trustworthiness continue to be critical attributes, more consumers are choosing their banking providers on the basis of a convenient, frictionless digital experience. For banks and credit unions of all sizes, these survey results reinforce the importance of modernizing every touch point of their customer journeys.”